1099-R received on IRA cash out that was opened using "Taxed" money from savings

[Leo2020]

About five years ago I opened an IRA using approx. $9,000.00 in "Taxed" money that I had in a savings account that I was closing.

About six months ago I closed the IRA account due to poor performance and received about $8,800.00.

The broker send me a 1099-R Form for tax year 2020 for a taxable amount of $8,800.00.

I don't understand why I need to pay taxes on this money since I have already paid the tax on it when it was earned.

Am I missing a form, etc.

Thanks for any help and/or direction.

[DavidD66]

The broker doesn't know if you took a tax deduction for the contributions or not  They have no way to know what your basis is.  They are just indicating that it is a taxable distribution, but the amount you will be taxed on is dependent upon your cost basis.  When you made the IRA contribution, you should have filed a Form 8606 - Nondeductible IRAs.  This form notifies the IRS that you are making a non-deductible IRA contribution.  Form 8606 is also used to report non-taxable distributions from an IRA.  To trigger Form 8606 in TurboTax:

• Open your return if it isn't already open.
• Click on Search, and type this exact phrase, including the comma: "8606, nondeductible ira contributions" 
• Click on "Jump to 8606 ...."
• Continue through the IRA section
• When you reach the screen "Any nondeductible contributions to your IRA?  Answer Yes, then continue.  TurboTax will generate and fill out Form 8606.

[Leo2020]

Thank you.

I gave it a try and once I filled out and saved the 8606 form it brought everything into line the way it should be.